![]() ![]() ![]() " began having severe financial difficulties due to Jaynes' mismanagement of the business," Masis states. Masis Staffing, a Massachusetts-based temp agency with an office in Richfield, filed suit saying that Jaynes and New Harvest Foods stopped paying for about 100 contracted workers it supplied at J&J's warehouse. Meanwhile, other companies started to complain about bills going unpaid. The family denied all wrongdoing, asked a judge to dismiss Jaynes' complaint and order him to pay the $8.4 million he still owed them for the company. Last August, they sued the Hannigans for $50,000, an amount Jaynes said he incurred due to the alleged failed disclosures. Jaynes' lawyers said he had the financial means to pull off the merger. "It operated as two independent companies under one management controlling the money." "We never got there," said Louis Peltier, who was warehouse operations manager at J&J until the company was recently shut down. And even by then, the operations of the two companies weren't fully united and had not taken the New Harvest name. Court documents show he still owes the Hannigan family nearly $8.4 million and Brooks nearly $4.4 million. Jaynes agreed to pay the owners in monthly installments over several years as well as a sizable lump sum due last August.īut Jaynes stopped payments to both families in July. Court records show the Hannigans sold J&J for $9 million and Brooks sold H. Brooks says in a legal complaint that Jaynes told him "he had interest in preserving the legacy of the family company and had financial backing of significant investors, as well as connections to well-known investment groups."Īfter months of discussions, both families signed over ownership of their companies to Jaynes on July 17, 2019. In legal filings, the families say Jaynes first showed interest in acquiring and merging the two companies in 2018. Their lawyers said their views and experiences are outlined in the lawsuits. Brooks, Phillip Brooks, and former owners of J&J Distributing, James Hannigan and his children Kevin Hannigan and Stephanie Melstrom, deny those allegations and said that Jaynes has not kept up payment terms of the deals.īoth families declined to comment on the record. "We've alleged fraud in the underlying initial acquisition transactions." "Jason was sold a bill of goods," said Terrance Moore, one of Jaynes' lawyers from Hellmuth and Johnson. But in court documents he alleges the families that previously owned the firms concealed troubles inside them, ranging from noncompliance warnings about organic certification received from the Agriculture Department to undocumented workers exposed by the Internal Revenue Service. Jaynes did not return several requests for an interview. While most were unwilling to go on the record, in some cases due to pending wage disputes, they confirmed many of the details laid out in the lawsuits. The Star Tribune contacted nearly a dozen former employees, customers and produce suppliers of the two companies. District Court in Minnesota and in state courts in Hennepin and Ramsey counties. The fate of the companies since then is documented in a half dozen lawsuits filed in U.S. Investor Jason Jaynes bought both companies in 2019 through an Edina-based private-equity firm he created, the Dragonfly Group, with an eye to renaming them as New Harvest Foods. ![]() Brooks, a 116-year-old produce wholesaler in New Brighton, is still operating but has laid off some workers. Two days later the doors on its Rice Street production plant and headquarters were closed. Paul, laid off its production workers on March 23. J&J Distributing, a 43-year-old company in St. Together, it seemed, they could fulfill nearly any grocery store or restaurant order.īut less than two years after a private-equity firm took over the family-run businesses, one closed and the other is imperiled by legal battles and unpaid debts. The longtime competitors had their own strengths and weaknesses - one was better at bagged and bulk produce while the other excelled in packaging organic, precut fruits and veggies. Two of the Twin Cities' longest-running fruit and vegetable distributors were to be acquired and merged under one new brand: New Harvest Foods. The marriage on paper looked destined for success. ![]()
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